HK/China Equity Long-Short

Osbert Tang, CFA

Osbert Tang is an equity analyst with over 20 years of experience with focuses on China transport, infrastructure, industrials and utilities sectors. He has been based in Shanghai since 2003, accumulated nearly 20 years of on-ground knowledge on the Chinese economy and financial markets, and has a wealth of contacts with China corporates and government entities. 

Osbert has received votes from top-tier institutional investors and has been a highly-ranked transport and infrastructure analyst in the Asiamoney, Institutional Investors and Greenwich surveys. In addition to his extensive experience with international investment banks including RBS, ABN AMRO (both served as Shanghai Chief Representative), Paribas Asia Equity, Maybank Kim Eng and DBS Securities, he has been a senior analyst with Moody’s Investors Service with focus on ratings of China infrastructure and related LGFV issuers. He has also worked in the area of strategic development at Sun Hung Kai Properties Limited. 

Osbert holds a BBA from the Chinese University of Hong Kong, an MBA from the University of Texas at Austin and a MSSc in Applied Psychology from the City University of Hong Kong. He was accredited with the CFA charter in 1997, and is a member of both British Psychological Society and Hong Kong Psychological Society.

China Construction Machinery: Good to the Last Drop

China Comm Const (1800 HK): Positive Takeaways from Call with Company

China Comm Const (1800 HK): Every Dog Has Its Day

China Comm Const (1800 HK): Key Takeaways from Post-1H20 Result Investor Call

China Infrastructure: Record Special Purpose Bonds Issuance to Drive Construction Sectors in 2H20

Equity Bottom-Up

China Communications Construction / Equity Bottom-Up

China Communications Construction (1800 HK)

<p><a href="https://www.smartkarma.com/entities/china-communications-construction-co-ltd" target="_blank" data-smartkarma-citation="entities:265:1" rel="noopener">China Communications Construction (1800 HK)</a> (CCCC) finally returned to profit growth in 3Q20, with a YoY growth of 3.5%, much stronger than the 40.4% decline in 1H20. Stripping out non-recurring items and impairments, the underlying strength reached 19.6% in 3Q20, versus -20.4% in 1H20.  Both gross margin and EBIT margin have achieved expansion in the quarter as well.</p><p>More importantly, new contracts signed amounted to Rmb204bn in 3Q20, a tremendous 30% YoY growth, and accelerated from 11.9% in 1Q20 and 4.4% in 2Q20. CCCC will continue to benefit from the government's infrastructure spending spree and we expect its new contract momentum to stay resilient. At just 0.25x P/B (almost 2SD below historical average), this is an undervalued and overlooked turnaround play. It is also a key beneficiary of the government's infrastructure REIT program, in our view.</p>

China Communications Construction (1800 HK) (CCCC) finally returned to profit growth in 3Q20, with a YoY growth of 3.5%, much stronger than the 40.4% decline in 1H20. Stripping out non-recurring items and impairments, the underlying strength reached 19.6% in 3Q20, versus -20.4% in 1H20.  Both gross margin and EBIT margin have achieved expansion in the quarter as well.More importantly, new contracts signed amounted to Rmb204bn in 3Q20, a tremendous 30% YoY growth, and accelerated from 11.9% in 1Q20 and 4.4% in 2Q20. CCCC will continue to benefit from the government's infrastructure spending spree and we expect its new contract momentum to stay resilient. At just 0.25x P/B (almost 2SD below historical average), this is an undervalued and overlooked turnaround play. It is also a key beneficiary of the government's infrastructure REIT program, in our view.

China Comm Const (1800 HK): 3Q20 - A Return to YoY Growth